http://www.koreatimes.co.kr/www/news/nation/2010/07/116_70528.html

Summary: The environment for foreign businesses in South Korea has improved remarkably over the last decade, to meet global standards, and the ratification of the Korea-U.S. Free Trade Agreement (KORUS FTA) will be crucial in resolving future challenges in the business climate and the Korea-U.S. alliance, the outgoing president of Boeing Korea said.

U.S. committed to address concerns over autos, beef before November: White House [English, CSY]

http://english.yonhapnews.co.kr/national/2010/08/04/52/

Summary: The United States is determined to address concerns over lopsided auto trade and restricted shipments of beef in November before ratifying the free trade deal with South Korea months later, the White House said Tuesday.

S. Korea, Japan should resume FTA talks to boost ties: report [English, CSY]

http://english.yonhapnews.co.kr/business/2010/08/11/

Summary: South Korea and Japan should resume their negotiations for a free trade agreement (FTA) in an effort to strengthen ties between the two neighboring countries, a report said Wednesday.  Since the first negotiation session in December 2003, Korea and Japan had held about 10 rounds of talks to negotiate terms for an FTA. But the talks have been stalled since December, when they failed to iron out disagreements on manufacturing and agricultural sectors.

S. Korea aims for farm exports of US$6.4 bln this year: govt [English, CSY]

http://english.yonhapnews.co.kr/business/2010/08/09/

Full Text: South Korea aims to meet this year's agricultural export target of US$6.4 billion by supporting overseas marketing efforts of local food producers, the government said Monday.  The Ministry for Food, Agriculture, Forestry and Fisheries said that polls carried out on 273 large food exporters showed the outbound total is expected to reach just $5.4 billion by year's end. In 2009, the country shipped out $4.8 billion worth of food products.  "Exports in the first half surged to a record $2.6 billion, or a 21 percent gain from the year before, but were not enough to meet Seoul's annual target for 2010," said Gwak Bum-gook, head of the ministry food industry and marketing bureau. He said that because many farm products are harvested in the fall months, exports generally improve in the second half, but stressed that more has to be done to fuel overseas sales.

   The director general said the government in cooperation with the state-run Korea Agro-Fisheries Trade Corporation will increase foreign promotional events for local food products and will seek additional deals with large retail chains in Singapore and Japan that can fuel exports. At present, the country has 22 pacts with foreign distributors and retailers, which have helped exports in recent years.

   Gwak said that the agro-fisheries corporation will also allocate more manpower to help local companies make headway in emerging markets and offer various incentives. "Plans are underway to establish overseas logistics bases abroad that can be used by local companies," he said. The ministry, meanwhile, said that if the new support bears fruit, Seoul will be able to meet its goal of exporting $10 billion worth of farm, fisheries and forestry products by 2012. The figure represents an almost five-fold increase from $2.1 billion shipped out in 1981, and could help the farming sector provide more jobs and contribute to national growth.

2. Biotechnology Issues

None

3. Economic Issues

Korean Won to Strengthen to $1 = W977 by 2012 [Korean, OSY]

http://news.msn.co.kr/article/read.html?cate_code=1300&article_id

Summary: HIS, a U.S. based economic research firm, forecasted in its recent report that Korean Won would continue to gain strength against US dollar in the coming years.  The exchange rate forecasted for $1 was W1,010 in 2011 and W977 in 2012.

4. Grain & Oilseed Issues

Hot weather and drought in Russia and heavy rains in Canada have surged up wheat prices.  Black Sea area has also undergone a wave of uneasy weather pattern.  Hot money added an additional surge into futures markets.   (Korean: CSC)

http://www.newshankuk.com/news/news_view.asp?articleno

Russia announced an embargo on exports of wheat and other grain and grain products from August 15 through the end of this year as a result of drought.  (Korean: CSC)

http://www.hankyung.com/news/app/newsview.php?aid1

Chinese foreign direct investment (FDI) has heavily focused on grain production in Brazil.  Some major grain companies have tried to purchase land to cultivate corn and soybeans.  (Korean: CSC)

http://www.hankyung.com/news/app/newsview.php?aid

Government rice policy has faced strong oppositions (Korean: CSC)

http://www.nongmin.com/article/ar_detail.htm?ar_id

Summary:  Some rice policies government has ambitiously planned are likely to fail because farmers, NGOs and opposition parties have been against the government schemes.  Government has planned to divert old rice to feed for animal; do early rice tariffication; and support rice export with subsidy of transportation.

Diversion of old domestic rice to animal feed is unlikely to go for it because farmers, NGOs and opposition parties have blamed government for the patching-up policy of rice, rather coming up the old rice for lower income brackets and DPRK.  Ruling party and Blue House concurred with that it is not right time to divert.

Early tariffication is likely to come to nothing due to strong opposition from farmers groups who have asked government to prepare domestic countermeasures prior to rice market opening.  Diplomatic channels reportedly hoped that the rice issue should not stimulate the United States who is supposed to ratify KORUS FTA soon.        

Gov’t to Reduce Space Requirement for Rice Winery to Help Smaller Producers [Korean, OSY]

http://news.donga.com/Society/3/03/20100825/30719671/1

Summary: According to the draft of tax law revision that the government announced on August 24, rice wineries are no longer required to maintain minimum 6 sq. meter of space for fermentation room.  The revision also reduces minimum processing space requirement for traditional liquor producers.  Another important revision to the industry includes allowing addition of fruit or non-rice ingredients in rice wine up to 10 percent of the total weight.  Products that contain other ingredients over 10 percent of its weight loose rice wine status.

Bakeries woo wheat farmers [English, CSY]

http://joongangdaily.joins.com/article/view.asp?aid=2924443

Summary: With the price of wheat hitting record highs in recent weeks, local farmers are seeing demand soar as the gap between the prices of domestic and foreign grain equalizes.  Wheat produced in Korea is now just 1.5 times more expensive than imports, but in 2005, that figure was four times the global price. As a result, the food industry expects the domestic wheat market to hit 25 billion won ($21.4 million) this year, up from 16 billion won last year.  Local production is also rising, with a harvest of 33,000 tons expected this year, up from 19,000 in 2009 and 7,400 in 2008. Farmers are still having trouble filling orders.

Spike in wheat prices stirs concern [English, CSY]

http://joongangdaily.joins.com/article/view.asp?aid=2924348

Summary: Wheat prices posted the highest monthly gain in July since 1959 and hit a 20-month peak this week, sparking fears of an upcoming “agflation,” or an inflation driven by rising agricultural commodity prices.  The cost of flour in Korea will not change immediately because of remaining inventory. But, coupled with recent increases in public utility charges and U.S. sanctions against Iran that could unseat the stability of oil prices, consumer prices are in danger of climbing unbridled.

5. Livestock Issues

U.S. Beef Imports Surge 57 percent [Korean: BYK]

http://biz.heraldm.com/common/Detail.jsp?newsMLId=20100729000698

Summary: According to USMEF, total beef imports during the first half of 2010 increased by 21.1% (marking 124,669 MT) over the same period in 2009 (102,940 MT).  Imports of Australian beef imports increased by 7.8% and marked 55,002 MT.  U.S. beef imports during the first half of 2010 was 56.8% higher than the same period in 2009, and amounted to 37,591 MT.

Gov't pushing for livestock licensing to stem future animal disease outbreaks [English, CSY]

http://english.yonhapnews.co.kr/business/2010/08/03/

Summary: The government said Tuesday it plans to introduce a new licensing system for livestock farmers this year as part of its measures to prevent the outbreak of animal diseases. In a meeting with livestock farmers, the farm ministry stressed that there is a need to get farmers to be more responsible for raising animals since a mistake can affect the entire industry and cause substantial losses.

Senator Baucus demands for full liberalization of the Korea beef market [Korean: BYK]

http://news.sbs.co.kr/section_news/news_read.jsp?news_id

Summary: Senator Max Baucus warned that he could stop the KORUS FTA from being ratified if Korea does not fully liberalize the beef market.  He made this comment during a hearing at the Congress and added, “No deal is better than a bad deal.”  However, USDA Under Secretary Kirk Miller stated in an interview with Inside U.S. Trade that “Although the USG maintains the position that the Korean beef market should eventually be fully liberalized, it is not clear whether the full liberalization should be a precondition for the ratification of the KORUS FTA.”. 

‘Dry aged steak’ is all the rage these days … ‘air-dried’ like jerky … rich taste in every bite

 [Korean: BYK]

http://travel.chosun.com/site/data/html_dir/2010/08/18/

Full Story:

Dry age method used before the development of vacuum package

High price tag due to mass shrinkage from moisture loss

Regular steak better if juiciness is preferred

6. Markeing Issues

CJ to Increase Table Sugar Price by 8.3 Percent from August 1 [Korean, OSY]

http://www.fnnews.com/view?ra=Sent1001m_View&corp

Summary: CJ, a leading supplier of table sugar, has increased its ex-factory table sugar price by 8.3 percent from August 1.  CJ explained that rise of raw material cost was the cause of the price increase.  CJ added that Chinese table sugar suppliers have already increased their ex-factory prices by around 100 percent earlier this year.

Retail Chain Buyers in War to Secure Fruits for the Upcoming Korean Thanksgiving Day Season [Korean, OSY]

http://news.donga.com/Economy/Market/3/0108/20100802/30257222/1

Summary: Harvest of Korean pear, a key fruit for the Korean Thanksgiving Day ritual, is expected to be 15 – 20 percent smaller this year than usual mainly due to severe frost in early spring.  As a result, fruit buyers in retail chains are working around the clock to secure additional supplies of pear.  Most retail chains are offering an aggressive 50 day cash advance to close up the deal as soon as possible.  Buyers are also traveling new growing regions to identify new suppliers.

Korea Ranks 3rd among OECD Countries in Consumer Food Price Increase [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/08/04/

According to OECD data, consumer food price in Korea increased 4.1 percent in June 2010, which was third highest among OECD countries after Turkey (5.6 percent) and Iceland (4.3 percent).  Korean government is considering various measures to curve down the food price.

The ‘Big Mac’ Index Suggests that Korean Won is Under-valued against U.S. Dollar by 24 Percent [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/08/03/

According to updated Big Mac Index announced by the Economist, UK, on August 4, the index for Korea marked $2.82, which was 24^th highest among the 44 countries surveyed.  The index for the U.S. marked $3.73.  The gab in the index suggests that Korean Won is currently 24 percent under-valued against USD.

Lotte Mart Opens Its 100th Store in Foreign Country [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/08/04/

Summary: Lotte Mart opened a new store in Indonesia on August 5, which was 100^th store that Lotte Mart had opened in foreign countries.  Lotte Mart has been the most aggressive Korean retail company that pursued an expansion into the foreign market as evidenced by the fact that It took only four years for Lotte Mart to achieve 100^th stores in foreign market.  Lotte Mart’s 100 foreign stores are composed of 78 stores in China, 2 in Vietnam, and 20 in Indonesia.

Russia Bans Grain Exports for the Rest of the Year [Korean, OSY]

http://news.donga.com/Inter_List/3/02/20100806/30345653/1

Summary: Russian government announced that it has ordered ban on grain exports for the rest of this year.  The government spokesman said on August 5 after the cabinet meeting that widespread concerns around possible domestic food shortage due to unfavorable weather this year have led the decision.  The international grain market fluctuated widely on August 5 after Russian government’s announcement.  The price of wheat at Chicago commodity market rose 0.6 dollar per bushel to a two year high 7.85 dollars.

Imports of Exotic Pets on a Rapid Increase [Korean, OSY]

http://news.donga.com/Economy/Market/3/0108/20100810/30430096/1

According to the Korea Customs Office data, imports of pet animals during the first half this year amounted to $4.06 million, up 22.9 percent from the same period last year.  While imports of dogs showed little change from last year (2,501 dogs, up 1.1 percent from last year), imports of exotic animals showed double digit increases (2,754 lizards, up 87.1 percent; 5,500 Iguanas, up 27.9 percent; 1,131 chameleons, up 14 times).  Unit value of imported pet animal also showed a increase as evidenced by the import data that while imports of pet animals in number increased 14.4 percent during the first half, imports in dollar value increased 22.9 percent.

S. Korea's pet imports jump 22.9 pct in H1 [English, CSY]

http://english.yonhapnews.co.kr/business/2010/08/10/

Summary: South Korea's pet imports jumped 22.9 percent in the first half of this year mostly due to growing demand from unmarried people, one-person households and senior citizens, a report showed Tuesday. According to the report by the Korea Customs Service, imports of pet animals came to US$4.06 million during the January-June period, compared with $3.31 million tallied a year earlier. The imported pets included dogs, cats, iguanas, chameleons, birds, fish, turtles and insects.

Young Consumers Fall in Love with Japanese Style Curry Restaurants [Korean, OSY]

http://kr.news.yahoo.com/service/news/shellview.htm?articleid

Summary: The number of Japanese style curry restaurants is increasing rapidly in many areas in Seoul where young people gather.  For example, Hong-dae College street has a cluster of 20 Japanese curry restaurants.  Each of these restaurants is crowded with young people.  In particular, young females who follow Japanese culture (book, music, movies, tourism) and consumption trends (food & beverage, cosmetics) are the main consumers of Japanese curry restaurants.

Sales of PB Products Remain Strong in Supermarkets [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/08/16/

Summary: GS Supermarket, a leading grocery supermarket chain, reported that PB (Private Brand) products were the top selling items in many food categories including fluid milk, Kimchi, and bottled water, during January through August this year.  GS Supermarket plans to expand its PB product portfolio because consumers are looking for products of better values under the on-going economic slump.

Family Mart Convenience Store Chain Reaches 5,000th Store [Korean, OSY]

http://biz.chosun.com/site/data/html_dir/2010/08/16/

Summary: Family Mart, the leading convenience store chain in Korea, announced that the total number of stores in operation under the chain had reached 5,002 on August 16 with opening of 4 new stores.  Family Mart was established in 1990.  Everyday the chain services an average of 2.1 million customers.  The total cash register sales of the convenience store segment were estimated at 8 trillion won in 2009.  Family Mart plans to reach 8,000 stores under its umbrella by 2015.

Consumers Welcome “Oven Roasted/Baked” Processed Food [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/08/16/

Summary: Launchings of “Oven Roasted/Baked” food continue due to consumers’ health concerns over fried food.  For example, Orion, Crown, and Dunkin Doughnuts have launched oven baked doughnuts recently.  “Oven baked potato chips” by Haitai has recorded a 30 percent sales growth so far this year.  More quick service chicken restaurants are serving oven roasted (not fried) chicken.

Leading Department Store Chains in Rally for Adding New Stores [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/08/16/030

Summary: Leading department store chains have announced openings of many new stores in the coming months.  In August, Lotte Department Store will open two new stores.  Hyundai Department Store will open one new store in August.  Additionally, Hyundai plans to add 5 new stores in the next four years.  Shinsegae Department Store and Galleria Department Store will open one store each in December.  

Hypermarkets and Department Stores Report Good Sales Growth in July [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/08/19/0302000000

Summary: Sales of large-scale hypermarkets and department stores grew 8.2 percent and 10.1 percent respectively in July compared to the same period last year.  The number of purchases in the stores also increased by 6.8 percent for hypermarkets and 6.7 percent for department stores.  Analysts suggests that shorter than usual monsoon season this year resulted in increase of consumer traffic to the retail stores.

Korean Ranks 12th in the World in Tobacco Exports [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/08/19/0301000000

According to a recent WTO agricultural trade report, South Korea was world’s 12^th largest exporter of tobacco products in 2007.  South Korea accounted for 1.66 percent of the total tobacco products traded worldwide.  Among other 21 agricultural & food products that WTO surveyed, Korea was world’s 13^th largest exporter of pork meat with 0.25 percent of world market share.

70 Million Boxes of Goods to be Home-Delivered During 10 Days in Chuseok Shopping Season [Korean, OSY]

http://www.yonhapnews.co.kr/economy/2010/08/30/0302000000

Dae-Han-Tong-Woon, the leading courier delivery service company in Korea forecasted that a total of 70 million boxes of goods will be home-delivered during the 10 days before Chuseok (Korean Thanksgiving Day) this year, which is 25 percent increase from last year.  The company also forecasted that gift deliveries for Chuseok this year will contain more meat and processed foods than last year, while fresh fruits will be less preferred due to high price.

7. North Korea Issues

None

8. Other/Miscellaneous Issues

Korea-origin rule will boost local food items [English, CSY]

http://joongangdaily.joins.com/article/view.asp?aid=2924072

Summary: The Korean government will require restaurants from Aug. 5 to expand the range of menu items that must be identified as having a domestic or foreign origin in terms of their food ingredients.  The move could provoke criticism that the measure amounts to a non-tariff barrier for foreign food imports since Korean consumers prefer food items that have domestic origin.

The Ministry for Food, Agriculture, Forestry and Fisheries (MIFAFF) said that all restaurants must display the country origin list, replacing a previous regulation that applied only to restaurants larger than 100 square meters (1076 square feet).  The list of food categories requiring country of origin labels will be expanded to include duck meat, salt and alcoholic beverages, such as soju, beer and makgeolli, as well as chicken that is ordered for take-out. The previous list was limited to five basic categories, including beef, pork, rice, cabbage kimchi and chicken consumed on restaurants’ premises.

Haitai Beverage to be put on the block by Asahi  [English, CSY]

The Japanese firm reportedly wants Lotte as a new partner

http://joongangdaily.joins.com/article/view.asp?aid=2924130

Summary: Asahi Breweries of Japan said yesterday that it will sell Haitai Beverage, the No. 3 Korean soft drink company with a 10 percent market share, since Asahi reportedly wants to establish a partnership instead with Lotte.  Asahi Breweries acquired 20 percent of Haitai Beverage in 2000 and became its controlling shareholder in 2004, with a current stake of 58 percent.

Nihon Keizai Shimbun earlier reported that Asahi wanted to sell its Haitai stake because of falling sales and earning losses and to align itself with Lotte, which has a 50 percent local market share. A Haitai Beverage representative confirmed the report, saying that employees were informed of Asahi’s decision on Monday. “Asahi’s decision is understandable as we’ve sustained a lot of losses,” said Kim Chang-seon of Haitai Beverage. “As of yet, the field is open to whoever might express interest and we hope to find a negotiation partner with a similar vision to our goals.”

S. Korea, China Agree 2011 EEZ Fishing Quota [English, CSY]

http://news.mk.co.kr/english/

Full text: South Korea and China agreed to cut the total allowable catch for 2011 in the exclusive economic zone (EEZ) of each other.  The agreement will limit the quota for Korea in China’s EEZ at 1,600 vessels and 64,000 tons, and the permit for China in Korea’s EEZ to 1,700 vessels and 65,000 tons.  Korea’s Ministry for Food, Agriculture, Forestry and Fisheries said “Korea’s fishing vessels remained unchanged but the fishing quota reduced by 2,000 tons, while China’s fishing vessels and quota reduced by 50 ships and 2,500 tons, respectively.”  The ministry also said “the two sides agreed to provide details within the earliest possible time to root out illegal over-fishing by Chinese fishermen.”

Sugar duties to be cut for rest of year [English, CSY]

http://joongangdaily.joins.com/article/view.asp?aid=2924455

Summary: South Korea's government said Tuesday that it will ease tariff duties on sugar imports by the end of this year in an effort to stabilise prices in the domestic market, Yonhap news agency reported.  Under the tariff quota system, the duties on sugar imports will be cut from the current 35 percent to zero, according to the Ministry of Strategy and Finance. The exemption will be applied to 100,000 tonnes of sugar imports to be delivered from late August to December.

S. Korea secures 46,800-ton pollack fishing quota from Russia [English, CSY]

http://english.yonhapnews.co.kr/business/2010/08/06/0502000000

Summary: South Korea has secured the right to catch 46,800 tons of pollack in Russian waters this year, 7,800 tons more than in 2009, the government said Friday.  The Ministry for Food, Agriculture, Forestry and Fisheries said the agreement reached earlier in the week is 6,800 tons more than what Moscow originally agreed to give South Korean fishing boats during talks held last year.

S. Korea poised to draw up greenhouse gas reduction plan [English, CSY]

http://english.yonhapnews.co.kr/business/2010/08/10/0501000000

Summary: South Korea will establish a comprehensive greenhouse gas reduction plan by March so it can take positive steps to help stem global warming, the government said Tuesday.  The Ministry of Knowledge Economy said it will create a special energy conservation and greenhouse gas reduction committee that can set up policy goals and plot a course for future research and development (R&D) efforts.

KFDA Prosecutes 6 Food Manufacturers for Selling Fake “100%” Concentrated Blueberry Juice [Korean, OSY]

http://finance.daum.net/news/finance/main/

Summary: KFDA investigation found that six of the “100% concentrated blueberry juice” products currently sold in the market contain non-blueberry ingredients such as sugar and grape juice.  One of the companies indicted after the investigation was Boryung Medical, a leading pharmaceutical company in Korea.  According to KFDA, the fake “100 concentrated blueberry juice” distributed by the 6 companies amounted to 5 billion won.

International Table Sugar Price Up 45% in Three Months [Korean, OSY]

http://news.donga.com/Economy/Market/3/0108/

Summary: The price of table sugar in the N.Y. International Commodity Exchange Market (ICE) rose 0.47 cent per pound on August 20 to reach $19.95, a highest level in five months, after USDA’s announcement of increasing import quota on table sugar.  Inventory of table sugar in the U.S. market stays at the lowest level in 40 years, and market analysts forecast that international price will further incline due to increase of import quota by the U.S.

Korea will become a Bridgehead for Monavie’s Acai Berry Business in Asia, Chairman Larsen [Korean, OSY]

http://news.mk.co.kr/newsRead.php?sc=50100027&cm

Summary: Chairman Dallin Larsen of Monavie, a Utah based network marketing company that launched Acai berry juice for the first time in the world in 2005, said in a press interview in Seoul on August 27 that Korea will become a bridgehead for Monavie’s Acai berry business in Asia.  Monavie Korea, established in late 2009, has sold 21 billion KRW of Acai berry products in Korea during the first 5 months of business.  A total of 86,000 Korean consumers have registered in Monavie Korea’s sales network so far.  Acai berry is grown only in Amazon region in Brazil.  The berry contains 33 times more anti-oxidant compound Anthocyanins than red wine, or 6 times more than blueberry.